Tropical Places to Retire in the Caribbean and Central and South America

By far, the most popular tropical retirement places are in Mexico and Central America; however, many of the Caribbean islands are great tropical places to retire, as are a few places in South America.

After Mexico, the two countries most often mentioned for tropical retirement are Panama and Costa Rica. They are often compared to each other because of their similarities: beautiful, rugged mountain rainforests; plenty of first-rate hiking, birding, surfing, diving, snorkeling, kayaking, and other popular adventure options; and friendly Spanish-speaking people. Most locations in both countries are less than an hour from either the Caribbean Sea or Pacific Ocean. Add to this that the two countries happen to be next-door neighbors, and neither has a military, relying instead on national and local police for safety and enforcement.

Differences abound as well. Both unemployment and the poverty rate are lower in Costa Rica. Costa Rica’s economy is more diversified, with strong growth in tourism and technology sectors. Panama relies on agriculture and construction sectors, and benefits from being a major international business center. The expansion of the Canal represents a staggering investment for Panama, but should provide significant revenue for decades to come. Completion is scheduled for 2014. Due to Panama’s unique geologic history, volcanic activity is almost non-existent and earthquakes are rare. Costa Rica has some 100 volcanoes, several of which are very active, although rarely violent. Costa Rica is more focused on environmental issues, and is striving to become the first carbon-neutral country. Panama has protected vast interior watershed areas on both sides of the canal, primarily for economic reasons, including to provide fresh water vital for the operation of the canal lock system. Costa Rica has a longer history of political stability and has elected the region’s first female head of state. Panama has arguably the greater potential for growth and opportunity, as it has just recently entered an era of political stability and economic diversification. Find out more about Panama on our Retire in Panama page.

Additional retirement choices are many: in addition to Mexico, Costa Rica, and Panama, you can choose from Roatan (Honduras), Belize, Nicaragua, Guatemala, or one of the islands of the Caribbean. New retirement countries are beginning to attract retirees as well. including Brazil, Ecuador and Uruguay. For a financial comparison of these new choices to the older standards, like Mexico, read Retirement Places Compared on our Boomers Blog. To decide which country you want to retire to, you’ll need to first understand what you can expect when moving to a tropical land far from home.

No matter where you contemplate retiring abroad, you will encounter cultural differences and challenges that may alter your notion of retiring in an exotic foreign country. Much to the surprise of many Americans, as well as Canadians and Europeans, the rest of the world is not our playground and is not an extension of our culture and values. Too often the countries and people in these tropical paradises are expected to be reflections of life in the resorts. The number one rule for retiring overseas is: “It’s their country; leave your North American standards and expectations behind.” The second rule derives from the first: “If you want everything the same as at home, don’t leave.” Many people who abandon retirement in tropical Latin America do so because they are unable, or unwilling, to accept the compromises or follow the rules necessary to live in another culture. Other common reasons include health and family.

Customer service: Our cultural expectations about customer service are focused on promptness and efficiency. I have learned that customer service in tropical Latin American countries is based on politeness, deference, and focusing on your specific task. In countries where jobs are harder to find, employment is highly valued, not taken for granted. It may be frustrating to an American to select an item at a store and be assisted by several people; one to fold the clothing, another to gather the items together for the cashier to ring up, a third to ring up the sale, and another to place the purchase in a bag. To us it is slow and inefficient; to them it is employment. If an employee tries to be fast and efficient, someone else’s job could be in jeopardy. Another store clerk behavior that may seem annoying is to be followed around the store by an employee who is like your shadow; always there to answer a question or provide assistance. In Central American countries, the culture of shopping has been defined by the few wealthy people who could afford to shop. Store employees were trained to be virtual servants to customers. Of course, these customs are changing, especially in modern stores in urban areas, but the mindset endures.

Promptness: Have you heard someone on vacation refer to “island time?” Life is far more laid back and relaxed in the tropics. What we might label laziness or incompetence is a way of life long lost to Europeans and North Americans. You will find the people of tropical Latin America to be the nicest, friendliest people. Maybe they are living life a little more sanely than we are. So, if you are accustomed to things happening on a timely basis, you might be in for a shock. “I’ll take care of that right away” could mean next week, or even next month. You must be prepared to accept the fact that things take a lot longer to get done than you are accustomed to. Deal with it.

Language: You’ve read that “everyone speaks English there.” Don’t believe it. Even in countries where English is the official language (thanks to the colonial past), the citizens speak dialects like Creole, with lots of local color, slang, and accent. So, unless you plan to buy everything from a hotel manager or real estate agent while living in a tropical retirement country, learn the language. Even more important, get to know the people. Keeping to yourself, which has become part of the culture in much of our native country, will make the adjustment much more difficult in a new tropical home.

Laws: There is not much to say here except it’s their country, you are subject to their laws, and you are expected to behave in a lawful manner. Some infractions that may seem minor to you could result in severe penalties; know the laws in a foreign country. Don’t expect the laws in another country to provide the same protections afforded you in your country of origin, either. Laws concerning disclosure are conspicuously absent in many countries; always rely on an attorney who speaks your language when purchasing property or investments in another country.

Customs: To North Americans and Europeans, casual dress is acceptable in a variety of situations. Some customs in tropical Latin America are far more conservative than might be expected. In Panama City, women wear dresses and men wear long pants, collared shirts, and even jackets routinely while at work or out for a night on the town. In nearly all of those countries, swimwear is appropriate only at the beach. The only people who you will see wearing flowery tropical shirts on the streets of Panama City or San Jose are conspicuous North American tourists. Do you want to reduce the possibility of becoming a crime victim in a foreign country? Try blending in; the more you look like the locals, the less you look like a tourist. Duh. People in these socially conservative countries believe in politeness and courtesy. Failure to return a friendly greeting is considered rude. Addressing others in a respectful manner is the norm; too bad it’s not like that in America.

Infrastructure and utilities: We take reliable electricity for granted in our country. Throughout tropical Latin America and the Caribbean, electrical power is less robust and subject to occasional or even frequent outages. The locals don’t get excited about it and you shouldn’t either. Water supply is not inexhaustible and shortages happen. Much of the public water supply is safe to drink, especially in Panama and most of Costa Rica. Elsewhere, inquire, and if you’re not sure, stick to filtered or bottled water. Recycling is virtually non-existent. Trash collection may not happened for weeks because of equipment problems. Public sewage systems are the norm only in larger modern cities. Roads are generally not very good, with the exception of some urban areas and tourist zones. This varies from country to country, region to region.

In summary, enjoy the astounding beauty, serenity, and friendliness of a future tropical home. Don’t apply any of your native country’s expectations to life in the tropics. Instead, get to know the people, their culture, language, customs, laws, and way of life. Remember why you left the rat-race back home, and CHILL OUT!